Too many home insurance claims can hurt consumers

When it comes to home insurance, consumers should keep in mind that making a number of claims could hurt their chances of having their policies renewed.

A recent article from CBS MoneyWatch quoted J.D. Howard, who is the Insurance Consumer Advocate Network's executive director. Howard noted that consumers who make more than two claims in a period of three years may end up creating a "red flag" for home insurance underwriters.

Howard says he recommends homeowners only file a claim if the repairs will cost three times their home insurance deductable.

"The insurance company sees too many small claims as a homeowner using his insurance policy to pay for upkeep on his house," Howard said.

Furthermore, changing insurance companies won't hide the claims a person has made. The story notes that the industry keeps tracks of claims made through the Comprehensive Loss Underwriting Exchange database.

There are some things people can do if they are not happy with the claims process. The Insurance Information Institute notes that consumers can speak with the person who sold them the policy, or they may opt to contact their state's insurance department.